Transparency Needed in Government Ship Sales


By Denise Krepp 2016-06-02 15:09:59

Last week, I shared with readers that the U.S. General Services Administration (GSA), the agency that auctions off obsolete government vessels, does not track the international wires used to pay for them, a requirement of federal law. The Department of the Treasury is the agency that collects the money, and we've recently learned that they don't examine the source of this foreign funding either.

On February 18, 2016, Jon Ottman, a maritime historian, submitted a Freedom of Information Act request to Treasury. He was “following the money,” seeking information on the international wire used to purchase the former Coast Guard Cutter Storis, an obsolete vessel that was illegally scrapped in Mexico in late 2013. GSA officials told Mr. Ottman to contact Treasury because GSA doesn't track where the money comes from.

Sadly, neither does Treasury. On February 26, Treasury informed Mr. Ottman that the Bureau of Fiscal Service, the Financial Crimes Enforcement, and the Internal Revenue Service do not “maintain records that would be responsive to your request.” Treasury then recommended that Mr. Ottman contact the U.S. Coast Guard or the U.S. Customs and Border Protection, as they “would be the agencies most likely to maintain the record you have requested, should such records exist.”

Let's recap this story. GSA auctioned off a former Coast Guard cutter in 2013 to an individual who used a foreign wire to purchase her. GSA, as highlighted previously, does not include non-parties like the U.S. Customs and Border Protection in inter-governmental auction discussions. Treasury is the entity that collects the international wires but doesn't maintain records of these transactions and is recommending that all inquiries be directed to those that clearly don't have the records either.

I'm not sure when we arrived in Alice's Wonderland, but we're there – and as in the story, Mr. Ottman is having difficulty finding what he seeks because no one is giving him a straight answer.

Senator Bill Cassidy, Senator David Vitter and Congressman Garret Graves (all R-LA) introduced legislation last year that would overhaul the process through which obsolete government vessels are disposed. It will also require Treasury to track the foreign funds used to purchase these vessels. The legislation is named after the former Coast Guard Cutter Storis and I encourage everyone to support it. Wonderland should remain in the pages of children's books – it shouldn't be reality.

Denise Krepp is a domestic ship recycling advocate and former Chief Counsel, U.S. Maritime Administration.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.